Businessmodel of Canonical

Customer Segments

Canonical has a segmented market business model, with customer groups that have slightly different needs. The company targets its offerings at businesses and governments.

Value Proposition

Canonical offers five primary value propositions: accessibility, convenience, pricing, performance, and brand/status.

The company creates accessibility by providing a wide variety of options. It makes Ubuntu available worldwide through retail channels, most major public clouds, and its network of partners. In addition, the platform runs on several devices, including computers, smartphones, tablets, and TVs.

The company offers convenience by making life simpler for customers. It provides employees to assist with all aspects of Ubuntu management, from design and development to training and certification to support.

The company offers a pricing value proposition. Customers can download, use, and share Ubuntu for free. Moreover, they can try its complementary tool Landscape free for 30 days.

The company demonstrates strong performance through tangible results. It helped the Penn Manor school district set up a network of 1,700 Ubuntu laptops. In one year, savings on license fees for the computers (as compared to an alternative laptop) amounted to $200 per laptop, a total of $345,000.

The company has established a strong brand due to its success. It touts Ubuntu as the leading operating system for cloud operations – used by most public cloud workloads, new smart gateways, advanced robots, self-driving c ars, and switches.

Thanks to Canonical’s work with top phone and PC manufacturers, Ubuntu is available on computers sold at more than 3,000 retailers in China, India, and Mexico. All major hardware vendors, software vendors, system integrators and cloud providers have certified their technologies on Ubuntu. Lastly, Canonical has staff members operating in over 30 countries worldwide.

Channels

Canonical’s main channels are retail channels, major public clouds, and its network of partners. The company promotes its offerings through its website, social media pages, and conferences.

Customer Relationships

Canonical’s customer relationship is primarily of a personal assistance nature. The company assists customers with its flagship service, Ubuntu Advantage, through which it does the following:

• Plan and Install – The company builds and installs a solution on trial systems, monitors it, then provides deployment recommendations
• Deploy – The company configures and then deploys the system
• Train – The company trains clients on how to manage their deployments
• Manage – The company works with client teams to monitor and optimize their deployments on an ongoing basis, offering 24/7 phone, e-mail, and portal support Despite this orientation, there is a self-service component. The company maintains the Canonical Knowledge Base, an online library of articles about technical issues. It is available exclusively to Ubuntu Advantage subscribers. It also offers Landscape, a systems management tool designed to monitor and support networks of desktops, clouds, and servers.

It provides features such as automated updates and deployment of its reference architecture OpenStack cloud. Furthermore, the firm‘s website offers the Ubuntu design blog, with articles written by the Canonical design team.

Lastly, there is a community element in the form of a peer forum where clients can interact.

Key Activities

Canonical’s business model entails designing, developing, and delivering its services to its customers.

Key Partners

Canonical partners with other firms to help them sell its offerings or enhance usage of the offerings for the firms’ customers. The types of partners are:

• Public Cloud – As part of its public cloud providers program, Canonical provides optimized Ubuntu images, management, and commercial support to the  biggest clouds in the world.
• OpenStack – The company uses an integration lab called OpenStack Interoperability Lab to test its cloud partners’ products in various Ubuntu OpenStack configurations.
• Charm – The Charm Partner Program is described as the fastest route for ISVs and solution providers to take advantage of all that the Ubuntu cloud and server ecosystem has to offer.
• Software – The company provides a range of tools, programs, and trainings to independent software vendors (ISVs).
• Hardware  – The company offers an end-to-end solution for manufacturers of AMD, Intel, and ARM-based servers and client devices, including Dell, HP, and Lenovo.
• Phone – Through the Ubuntu Carrier Advisory Group (CAG), the company gives handset makers and mobile network carriers the opportunity to help shape Ubuntu’s mobile strategy.
• Retail – The company offers marketing materials to help retailers increase traffic, profits, and revenues through the sale of PCs pre-loaded with Ubuntu.
• Channel – The company enables channel partners to provide management and support for Ubuntu,  expanding their service portfolios.
• Internet of Things – The company enables makers of smart devices to sell software to their customers and deliver updates on the open Ubuntu Core platform. Specific partners include the following: Asus, EMC, Intel, AMD, Emulex, and Amazon Web Services.

Beyond these partners, Canonical also works with developers by providing with Ubuntu sofware developer kits they can use to create relevant applications.

Key Resources

Canonical’s main resources are its human resources, who include the more than 500 designers, developers, and project managers that help design, develop, and  deliver its services. Many are Ubuntu desktop, server, and cloud experts.

Cost Structure

Canonical has a personal assistance structure, providing a premium proposition through significant personal service and frequent service enhancements. Its biggest cost driver is likely sales/marketing, a variable expense. Other major drivers are in the areas of customer support and cost of services.

Revenue Streams

Canonical has one revenue stream: revenues it generates from the sale of technical support and other Ubuntu-related services to customers. Sales typically occur through the formation of contracts.